Marketing consultant services to foreign universities qualify as export under Section 2(6) IGST Act when paid in foreign exchange

AAR Telangana ruled that marketing/recruitment/referral consultant services provided by applicant to foreign universities on principal-to-principal basis qualify as export of services. The applicant was held not to be an intermediary under Section 2(13) IGST Act as it lacks contractual relationship with prospective students and cannot represent foreign institutions in transactions with students. Since the service recipient (foreign universities) is located outside India and applicant provides independent consulting services, place of supply falls under Section 13(2) IGST Act, making it outside India. Services qualify as export under Section 2(6) IGST Act if payments received in convertible foreign exchange.

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Issues Involved:
1. Qualification as 'intermediary' u/s 2(13) of the Integrated Goods and Services Tax Act, 2017.
2. Liability to GST or qualification as 'export of services' u/s 2(6) of the Integrated Goods and Services Tax Act, 2017.

Summary of Judgment:

Issue 1: Qualification as 'Intermediary'
The Authority examined whether the Applicant's activity of providing services of 'Marketing/Recruitment/Referral Consultant' to foreign universities/colleges on a principal-to-principal basis would qualify as an 'intermediary' u/s 2(13) of the IGST Act. The Applicant has a 'privity of contract' with foreign colleges and universities and works as an independent contractor, receiving referral income or commission based on successful admissions. The Applicant does not have any contractual relationship with the prospective students and does not facilitate the supply of services between the foreign colleges/universities and the students. The Authority relied on various legal precedents and CBIC Circular No. 159/15/2021-GST to conclude that the Applicant is not an 'intermediary' as it provides services on a principal-to-principal basis without facilitating a service between two persons. Therefore, the Applicant should not be considered as an 'intermediary' for the purpose of Section 2(13) of the IGST Act.

Issue 2: Liability to GST or Qualification as 'Export of Services'
The Authority examined whether the Applicant's activity would be liable to GST or would qualify as 'export of services' u/s 2(6) of the IGST Act. The Applicant is located in India, and the recipient of services (foreign colleges/universities) is located outside India. The place of supply of the services is determined to be the location of the recipient, which is outside India. Since the Applicant and the foreign colleges/universities are not related entities, the activity qualifies as 'export of services' provided the payments are received in convertible foreign exchange. Therefore, the activity of the Applicant for foreign colleges and universities should qualify as 'export of services' in terms of Section 2(6) of the IGST Act.

Ruling:
1. The Applicant should not be considered as an 'intermediary' for the purpose of Section 2(13) of the IGST Act.
2. The activity of the Applicant for foreign colleges and universities should qualify as 'export of services' in terms of Section 2(6) of the IGST Act, provided the payments are received in convertible foreign exchange.

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